Revenooer Reminders About Charitable Giving

In an uncharacteristic display of helpfulness to taxpayers, the Revenooers recently issued a few reminders regarding some of the tax rules which affect folks making charitable donations in 2011.

  1. If you’re over 70-1/2, and thus already in the mode of receiving mandatory distributions each year from your IRA, don’t forget this provision presently scheduled to expire at the end of this year:   you can have your IRA custodian directly transfer up to $100,000 from the IRA to an eligible charity.  Amounts so transferred are counted toward your annual minimum distribution requirement, though such amounts are not included in your taxable income (nor can you claim a charitable deduction).  Not all charities are eligible – donor advised funds (held by your local community Foundation, such as Parasol, f’rinstance) and supporting organizations are not eligible recipients.
  2. All those household goods that most folks deliver to charities each year are usually deductible – assuming they are in “good used condition or better”.  Junk from your garage doesn’t automatically qualify!
  3. Monetary donations to qualified charities are deductible, but don’t lose sight of these requirements, lest you lose the deductions in an audit challenge:  you must have a “bank record” or a written communication from the charity showing the name of the charity and the date and amount of the contribution, not to mention a contemporaneous “acknowledgement” from the charity for each deductible donation (be it in the form of cash or property).
  4. And maybe you want to “charge it”!  Contributions are deductible in the year made – thus donations charged to your credit card before December 31, 2011 count as a 2011 deduction on your tax return – regardless of the fact that you may not get around to paying the credit card bill until January.  Further, notes IRS, “checks count for 2011 as long as they are mailed in 2011.”
  5. Make sure that charity is legit – When in doubt as to whether the Ladies of the Night Women’s’ Temperance Union, for example, is a real charity, check out IRS Publication 78 – searchable and available online (www.irs.gov) which lists organizations qualified to receive tax deductible donations
  6. And file the proper form as part of your tax return when you donate noncash contributions valued at more than $500:  that would be Form 8283.

Merry Christmas!

CONSULT YOUR TAX ADVISOR – This article contains general information regarding various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd. with offices in Incline Village and Reno.  He can be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentaries at http://blog.nolo.com/taxes

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